BILL ANALYSIS
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|Hearing Date:August 9, 2010 |Bill No:AJR |
| |27 |
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SENATE COMMITTEE ON BU.S.INESS, PROFESSIONS
AND ECONOMIC DEVELOPMENT
Senator Gloria Negrete McLeod, Chair
Bill No: AJR 27Author:Torrico
As Amended:May 3, 2010 Fiscal: No
SUBJECT: Colombia-United States free trade agreement.
SUMMARY: Memorializes Congress that the California Legislature
opposes the United States-Colombia Trade Promotion Agreement (Colombia
Agreement).
Existing law:
1)The United States Constitution gives the federal government the
power to enter into trade agreements. Federal law requires Congress
to approve international agreements.
2)Specifies that the Governor is the primary state officer
representing California's interest in international affairs.
3)Specifies the Business, Transportation and Housing Agency (BT&H) as
the primary state agency authorized to attract foreign investments,
cooperate in international public infrastructure projects, and
support California businesses, not otherwise assisted by California
Department of Food and Agriculture (CDFA), in accessing markets, and
requires the Secretary of BT&H to develop an international trade and
investment policy.
4)Specifies that the State's Single Point of Contact (SPOC), within
the executive branch, acts, in compliance with federal practice, as
the liaison between the state and the Office of the United States
Trade Representative (USTR) on trade-related matters.
5)Clarifies that the SPOC is often provided the opportunity to review
and comment on ongoing trade negotiations and requires the SPOC, in
addition to other duties assigned by the Governor, to do all of the
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following:
a) Promptly disseminate information from the USTR to the
appropriate state agencies, departments, and legislative
committees.
b) Work with the Legislature and appropriate state agencies to
review the effects of any proposed or enacted trade agreement
provisions on California environment, businesses, workers, and
general lawmaking authority and to communicate those findings to
the USTR.
c) Serve as the liaison to the Legislature on matters of trade
policy oversight.
1)Requires the Office of Planning and Research (OPR) to maintain and
update, a full and comprehensive list of all state agreements made
with foreign governments, updated within 30 days of the effective
date of each new agreement.
This bill declares that:
1) Violence against trade unionists persists to this day, with over
500 unionists having been murdered during the administration of
current Colombian President Alvaro Uribe.
2) The Office of the Attorney General of Colombia has secured
convictions in only about 5% of the over 2,700 cases of murder of
trade unionists, and in the vast majority of cases, the person
convicted of the crime is not the originator of the crime, but
rather carried out the order to kill.
3) Defamatory remarks regarding trade unionists and human rights
defenders in Colombia delegitimize the important and valued work of
human rights defenders and place individuals and entire
organizations at the grave risk of physical retaliation.
4) According to a 2008 Human Rights Watch report, numerous
politicians, including members of the Colombian Congress, have come
under criminal investigation for collaborating with paramilitaries;
the groups responsible for the majority of crimes against trade
unionists.
5) According to Human Rights Watch, there is overwhelming evidence of
broad, systematic, and illegal surveillance conducted by the
government of Colombia against hundreds of members of human rights
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organizations, political opposition parties and unions, as well as
journalists, and even clergy.
6) The United Nations Special Rapporteur on Extrajudicial Executions,
Phillip Alston, recently found that killings of innocent civilians
by the armed forces have occurred throughout the country.
7) According to the International Labor Organization, the labor laws
of Colombia fall short of minimum international labor standards.
FISCAL EFFECT: None
COMMENTS:
1. Purpose. This measure is sponsored by the California Labor
Federation . According to the Author, "In Colombia, those who
advocate for workers rights literally must fear for their lives.
In 2009 alone there were 48 unionists murdered in Colombia. Over
500 unionists have been murdered during the administration of
out-going Colombian President Alvaro Uribe. The Office of the
Attorney General of Colombia has secured convictions in just 5
percent of the murder cases involving trade unionists and only
after international pressure to do so. Paramilitary organizations
associated with powerful local and regional economic and political
interests make the threat of death all too real for workers who are
simply exercising their right to organize, bargain collectively,
and, if necessary, to strike. Human rights violations frequently
occur and there is widespread, systematic, illegal surveillance
conducted by the national intelligence of Colombia. The
International Labor Organization says Colombia's labor laws fall
far short of minimum labor standards."
2. Office of the U.S. Trade Representative (U.S.T.R). Created in 1962
by Executive Order as an agency within the Executive Office of the
President, the USTR negotiates directly with foreign governments on
internal trade agreements. The USTR consults states on provisions
of a trade agreement through: direct consultation with a state
Governor; a state SPOC and Intergovernmental Policy Advisory
Committee (IGPAC). Currently, when a trade agreement is under
negotiation, the USTR sends all correspondence and requests to
Governors. If a Governor agrees to bind the state or state agency
to the provisions or a procurement agreement, the USTR includes the
state or state agency as a bound party in the appendix to the
specific trade agreement. Past California governors have bound the
state to the terms of specific government procurement provisions
via the USTR directly.
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3. U.S. Trade Agreements. The U.S. Constitution grants the federal
government the power to enter into treaties and trade agreements.
The power, however, is vested in the U.S. Congress to ratify trade
agreements with a two-thirds vote of approval. Throughout the
trade agreement negotiation process, the U.S. has potential to
influence policy reforms, using a relationship with the U.S. as
leverage and incentive to bring about potential and positive
change.
The U.S. has trade agreements in force with 17 countries including
Australia, Bahrain, Canada, Chile, Costa Rica, Dominican Republic,
El Salvador, Guatemala, Honduras, Israel, Jordan, Mexico, Morocco,
Nicaragua, Oman, Peru, and Singapore. Congressional approval has
not been provided for trade agreements with Colombia, Korea, and
Panama. Canada has also negotiated, but not ratified, a trade
agreement with Colombia.
Besides trade agreements, the U.S. has a number of trade preference
programs that allow special access to U.S. markets for countries
that are considered developing markets and/or where the U.S. wants
to develop a stronger relationship. Colombia currently has access
to U.S. markets through the nation's general preference provisions
and the Andean Trade Preference Act (ATPA). The ATPA (enacted in
1991) is designed to assist Bolivia, Colombia, Ecuador, and Peru in
their fight against drug production and trafficking by expanding
their economic alternatives.
In addition to trade support, the U.S. funds Plan Colombia, a
multi-year initiative to reduce drug trafficking and promote
development. According to the Congressional Research Bureau, more
than $7 billion has been provided to Colombia (2000 to 2009)
pursuant to this initiative.
4. The Columbia Agreement. According to the USTR, the Colombia
Agreement was signed on November 22, 2006. When the Agreement
takes effect, Colombia will immediately eliminate most of its
tariffs on U.S. exports, with all remaining tariffs phased out over
defined time periods. The Colombia Agreement also includes
standards relating to customs administration and trade
facilitation, technical barriers to trade, government procurement,
investment, telecommunications, electronic commerce, intellectual
property rights, and labor and environmental protection. The USTR
states that U.S. firms will have better access to Colombia's
services sector than other WTO Members have under the General
Agreement on Tariffs and Trade.
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Colombia's Congress approved the Agreement and a protocol of
amendment in 2007. Colombia's Constitutional Court completed its
review in July 2008, and concluded that the Agreement conforms to
Colombia's Constitution. President Obama tasked the USTR with
seeking a path to address outstanding issues surrounding the
Agreement.
5. Human Rights Violations in Columbia. The United Nations' Office of
the High Commissioner for Human Rights (OHCHR) has had an official
presence in Colombia since 1997. The Colombia OHCHR office plays a
number of roles, including serving as an observer and reporter on
human rights and international humanitarian law violations. In
addition to the country level-efforts of the OHCHR, the Human
Rights Council of the General Assembly of the United Nations has
sent representatives to Colombia to assess conditions.
Most recently, the Special Rapporteur on the situation of human
rights defenders, i.e. people who advocate for human rights,
released a summary report on her September 2009 onsite review.
During the trip, she met with senior government officials, human
rights defenders and people in the communities. In her findings,
she acknowledges that Colombia has made significant progress in
improving the overall security of the country between 2002, when
President Uribe took office, and 2008, including having a
measurable decrease in the number of homicides. She also states,
however, that she is deeply concerned about the widespread
phenomenon of threats being made against human rights defenders
(including unionists) and their families, often through pamphlets,
obituaries, emails, phone calls and text messages. She states that
she received numerous accounts of threats in all places she visited
in the country. This phenomenon has reportedly worsened since the
beginning of 2009 and this fact was corroborated to her by the Head
of the National Police.
The report specially addresses the plight of trade unionists and
the increased threats and especially the continued practice of
"enforced disappearance and execution." Also included in the
report are concerns raised about the treatment of indigenous
leaders; Afro-Colombian leaders; activists for displaced persons;
women human rights defenders; journalists; youth activists; church
workers; lesbian, gay, bisexual and transgender; and magistrates.
Her recommendation to the international community is that it should
continue monitoring the situation of human rights defenders, in
particular the most targeted and vulnerable ones, and to express
support for the work of the human rights defenders, among other
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venues, before international and regional human rights compliance
mechanisms.
6. Colombia's Workers. International labor leaders and those in the
U.S. and California have repeatedly raised concerns that the
Colombian government does not have sufficient laws, nor does it
systematically enforce the laws it does have, in order to protect
the rights and lives of trade unionists.
In addition to the 48 trade unionists murdered in 2009, 29 trade
unionists have been murdered in 2010. Labor leaders have stated
that the Colombian government has been extremely slow to arrest and
bring to trial the people who were responsible for the more than
2,700 murders of Colombian trade unionists since 1986. Many of
those that have been tried have been tried in abstentia, resulting
in no real justice for those who have suffered at their hands.
7. California's Trade Economy. International trade is a key component
of California's $1.8 billion economy. If California were a
country, it would be the 11th largest exporter in the world.
Mexico is California's top trading partner, receiving $17.4 billion
in goods in 2009. The state's second and third largest trading
partners are Canada and Japan with $14.2 billion and $10.9 billion,
respectively. Other top-ranking export destinations include China,
South Korea, Taiwan, the United Kingdom, Hong Kong, Germany, and
Singapore. In 2008, 2.7 million people were employed by business
related to trade, transportation and utilities.
Colombia's $400 billion economy supported the importation of $11.3
billion of U.S. products in 2008. Top imports from all countries
to Colombia include industrial equipment, transportation equipment,
consumer goods, chemicals, paper, and fuels. In 2009, $319.8
million in goods from California were exported to Colombia.
----------------------------------------------------------
| California Exports to Colombia in 2009 |
----------------------------------------------------------
|------------------------+------------------+--------------|
| Product | Value ($) | Percent |
|------------------------+------------------+--------------|
|334 _Computers & | | 30.3 %|
|Electronic Prod. | | |
| |96,813,070 | |
|------------------------+------------------+--------------|
|325 _Chemical | 41,425,146| 13 %|
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|Manufactures | | |
|------------------------+------------------+--------------|
|336 _Transportation | 38,276,120| 12 %|
|Equipment | | |
|------------------------+------------------+--------------|
|324 Petroleum & Coal | 31,884,175| 10 %|
|Products | | |
|------------------------+------------------+--------------|
|All Others | 111,402,388| 34 %|
|------------------------+------------------+--------------|
|Total | 319,800,899| 100%|
----------------------------------------------------------
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|Source: TradeStats Express |
| |
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Supporters of the Colombia Agreement state that it offers tremendous
opportunities for California exporters. Most significantly, they
cite a number of tariffs, which will be immediately eliminated
(80%); the remaining tariffs will be phased out over 10 years.
Based on information from the U.S. Department of Commerce, the
following are examples of current tariffs and their proposed
reductions under the Colombia Agreement:
a) Computers and Electronic Products : Current tariffs are
between 8 and 15%. The Colombia Agreement covers 100% of U.S.
exports under the Information Technology Agreement, which will
receive 100% duty free treatment immediately upon the effective
date of the Colombia Agreement.
b) Chemical Manufacturers : Current tariffs are between 8 and
20%. Upon the effective date of the Colombia Agreement, 82% of
U.S. chemical exports will receive duty free treatment, with the
remaining tariffs being phased out over 10 years. Examples of
chemical and related products include pharmaceuticals, cosmetics,
fertilizers, and agrochemicals. Strong economic opportunities
cited in the literature include chloride, styrene, and
polyethylene.
c) Agricultural Products : Upon the effective date of the
Colombia Agreement, 53% of tariffs on agricultural products will
receive duty free treatment. As an example, this includes 100%
elimination of the price band system that results in tariffs as
high as 159% on U.S. dairy products. All Colombian duties on
U.S. dairy products will be eliminated in 15 years.
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8. Related Legislation. AB 2443 (Perez) requires the SPOC to provide
specified Legislative committees with copies of any official
position taken or comments, that any entity within the executive
branch of state government provided to the USTR relating to a
pending trade agreement. The measure is currently on Senate Third
Reading.
AB 1276 (Skinner) of 2009, would have prohibited a state official,
including the Governor, from binding the state, or giving consent
to the federal government to bind the state, to provisions of a
proposed International Trade Agreement, including the government
procurement rules, unless a statute is enacted that explicitly
authorizes a state official to bind the state or to give consent to
bind the state to that trade agreement. The measure was vetoed by
the Governor.
AJR 55 (Villines) of 2008, memorialized Congress that the
California Legislature supports the Colombia Agreement. The
measure was refused adoption in the Assembly Committee on Jobs,
Economic Development, and the Economy.
AB 3021 (Nu?ez, Chapter 621, Statutes of 2006). This bill
established the six-member California-Mexico Border Relations
Council (Border Council) comprised of all Agency Secretaries and
the Director of the Office of Emergency Services for the purpose of
coordinating activities of state agencies. The Border Council is
required to report to the Legislature on its activities annually.
AJR 14 (Jeffries, Chapter 73, Statutes of 2007). This resolution
memorialized the President of the U.S. and Congress to enact
legislation to ensure that a substantial increment of new revenues
derived from customs duties and importation fees be dedicated to
mitigating the economic, mobility, security, and environmental
impacts of trade in California and other trade-affected states
across the U.S.
SB 1513 (Romero, Chapter 663, Statutes of 2006) established the
California Trade and Investment Act of 2008. This bill gave
authority to BTH to undertake international trade and investment
activities and directed the development of a comprehensive state
trade policy, implemented through a trade strategy that engages
California's business community in a meaningful way.
SB 1762 (Figueroa, 2006) This bill would have prohibited the
Governor from binding California to provisions of international
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trade agreements without consent from the Legislature. The measure
was held in the Assembly Committee on Jobs, Economic Development and
the Economy.
SB 348 (Figueroa, 2005). This bill would have prohibited a state
official, including the Governor, from binding the state, or giving
consent to the federal government to bind the state, to provisions
of a proposed International Trade Agreement, including the
government procurement rules, unless a statute is enacted that
explicitly authorizes a state official to bind the state or to give
consent to bind the state to that trade agreement. The bill was
vetoed by the Governor.
9. Arguments in Support. Supporters argue that trade agreements can
provide great economic benefits to all impacted nations, or "they
can create a race to the bottom, increasing unemployment and
lowering wages for all workers. For an international trade
agreement to generate real economic development, it must be
premised upon enforceable labor standards." Supporters also note
that free trade agreements can work when good paying jobs and
enforceable standards are in place.
10.Arguments in Opposition. Opponents believe that current tariffs
prohibit successful trading in the Colombian market and elimination
of duties will create new opportunities for California exporters.
Opponents also note that this resolution is not legally binding and
would cast Colombia, an important trading partner, in an
unproductive light and believe that the Colombia Agreement is "a
critical element of the U.S. strategy to liberalize trade through
multilateral, regional and bilateral initiatives." They
additionally cite the rapid growth of exports to Colombia by small
and medium sized U.S. firms.
SUPPORT AND OPPOSITION:
Support:
California Labor Federation (Sponsor)
American Federation State, County, Municipal Employees, AFL-CIO
California Conference Board of the Amalgamated Transit Union
California Conference of Machinists
California Federation of Teachers
California Nurses Association
California Teamsters Public Affairs Council
Central Labor Council, AFL-CIO, of San Bernardino and Riverside
Counties
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Engineers and Scientists of California
International Longshore & Warehouse Union - AFL-CIO
National Lawyers Guild, Labor & Employment Committee
National Nurses Organizing Committee
North Bay Labor Council - AFL-CIO
Northern California District Council of the International Longshore
and Warehouse Union
Professional & Technical Engineers, Local 21
San Diego-Imperial Counties Labor Council AFL-CIO
San Joaquin Calaveras Central Labor Council
StanislaU.S. and Tuolomne Counties Central Labor Council AFL-CIO
UNITE HERE!
United Food and Commercial Workers Union, Western States Council
Opposition:
California Chamber of Commerce
California Farm Bureau Federation
Embassy of Colombia in Washington D.C.
Gathers Strategies
Palm Desert Chamber of Commerce
U.S.S-POSCO Industries
W.J. Byrnes and Co.
Consultant:Sarah Mason